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Automobiles

Ottawa Tells Stellantis and GM to Pay Border Price for Bailing on Canadian Production Promises

Strategic Insights

— 2 min read

Canada's Liberal government has informed US-based carmakers Stellantis and GM that they will no longer be eligible for counter-tariff exemptions on autos imported to Canada due to their failure to maintain Canadian-based production. The move comes after the companies announced cuts to their auto production plans in Brampton and Ingersoll, respectively. The federal government is flexing its power to deny the companies those exemptions, requiring them to pay an import duty on many American-made autos they ship into Canada.

Key Takeaways:

  • The federal government has notified Stellantis and GM that they are no longer eligible for the full break on Canadian counter-tariff duties on autos they import to Canada.
  • Stellantis will have an annual remissions quota of 50 per cent, meaning it will only be permitted to claim remissions on half its imports.
  • GM will face a 24.2 per cent annual remissions quota.
  • The move aligns with the government's long-standing position that carmakers must meet their contractual obligations and respect their commitments towards Canada and their workers.
  • The decision is important because Canada is the largest export market for the U.S. automakers, Flavio Volpe, head of the Auto Parts Manufacturers Association, said.
  • Unifor president Lana Payne welcomed the news, saying the union has been pushing for such a response by the federal government.
  • Industry Minister Mélanie Joly has said she will apply "maximum pressure" on the companies to respect their obligations to workers and to Canada.
  • The federal government continues to consider its legal options tied to the contracts Stellantis signed in exchange for funding support and production tax credits.
  • Formal notice was given to the companies on Thursday, hours after Prime Minister Mark Carney publicly acknowledged that talks on auto sector tariffs imposed by the U.S. would likely be punted into next year's review of the Canada-U.S.-Mexico trade agreement (CUSMA).

Statistics:

  • 50 per cent: Stellantis' annual remissions quota
  • 24.2 per cent: GM's annual remissions quota
  • 3,000: Number of workers left in the lurch after Stellantis cancelled plans to build a new version of the Jeep Compass in its retooled plant in Brampton
  • 1,144: Number of workers at GM's idled CAMI assembly plant in Ingersoll whose future is now up in the air
  • 2025: Year in which the auto tariff negotiations were put off by the Canadian government at the behest of the US, according to the text

Sources:

  • The Star's reporting
  • Finance department news release
  • Interview with Flavio Volpe, head of the Auto Parts Manufacturers Association
  • Interview with Unifor president Lana Payne
  • Interview with Industry Minister Mélanie Joly
  • Prime Minister Mark Carney's public statement on Thursday
  • The Star's previous reporting on the Canada-U.S.-Mexico trade agreement (CUSMA)

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